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The following article is extracted from:

THE STAR TUESDAY January 22 2002

Insurance claims By Bhag Singh


When there is an accident, it is normal for the party that has suffered a loss or is injured to ask for compensation. On this score "insurance" often comes to mind. It is thought that since damage or injury has been suffered, the insurance company will pay the money. But is this always so?

The general expectation that the insurance company will pay compensation is based on general perception, but there is often an inadequate understanding of what is required before an insurance company can be asked to pay compensation. Generally, the position with regards to making claims for insurance monies can be placed under two broad headings. One is where a person has insured himself with an insurance company for damage to property or injury to himself and for which he pays a premium to the company. In such a case the person has a contractual relationship with his insurance company. When damage or injury is suffered, such a person claims from his own insurance company on the basis of the contract of insurance which he has entered into.

So long as the damage or injury is within the scope of the cover provided, then the person is entitled to make a claim from the insurance company. The question of whose fault it was that caused the damage or injury in the first place does not arise at all. So long as damage suffered or injury is experienced, the stipulated amount must be paid. This is based on the assumption that the insured has not committed any breach of the contract of insurance which would otherwise entitle the insurance company to repudiate liability.

However where a person is not making a claim from his own insurance company but from the other party that he views as having caused him damage or injury, then compensation is based on different considerations. This is because such a claim is then based on the wrongful act of "negligence" which is a topic within the wider subject of tort. In such a case what is alleged is the negligence of the other party which forms the basis of the claim. Thus the contention will be that the other party is at fault.

In such a situation the right to recover the amount is dependent on the person having suffered injury to his body and damage to his vehicle and being able to prove that the collision was caused by the negligence of the other party. If it can be shown that it was the fault entirely of the party that suffered the damage or injury, then he/she will not be entitled to any compensation at all. If the party was contributory to the cause of the collision, then the compensation will be proportionally reduced.

If the matter cannot be amicably resolved, the party will have to sue the other party which caused the damage or injury. He will also have to prove that the other party was at fault. Only then will the other insurance company pay the amount on the basis of its obligation to indemnify the other party who caused the collision. The damages that a party is entitled to in such a situation have been laid out in various cases from time to time. The particular damage and injury is looked at and the surrounding circumstances are considered. Whilst special damages have to be strictly proved, general damages are guided by previous awards.

In connection with accidents and injuries suffered, a reader asks whether it is possible to make a claim if an injury is suffered but surgery is required in the future. He also wants to know whether surgical costs can be based on the charges of private hospitals.

The question arises partly because it is an expenditure that has not yet been incurred but may be incurred. At the same time it is a fact that private hospitals would charge more than a government hospital.

The answer to this - based on cases decided in Malaysian courts - would appear to be that if evidence shows that such surgery will be required in the future, then the court will immediately allow the expenses that will be incurred. But the question remains as to how much the expenses should be. However whether a person in such a situation must seek treatment in a government or a private hospital will depend very much on the nature of the treatment required, availability of facilities as well as the personal circumstance of the injured person.

The position in law appears to be that in order for a person to seek treatment at a private hospital, such a person must show that his request is reasonable. Such reasonableness will be determined by looking at the nature of the injury and the surrounding circumstances.

If a serious dispute arises the court will have to make a decision based on the facts of the particular case. General principles can be laid down but actual decisions will depend on what the real situation is.


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